Building a solid long-term care program

By Chou Li-fang 周麗芳 /

Tue, Feb 10, 2009 - Page 8

The Lunar New Year celebrations late last month witnessed the reunion of many a family, including visits to family members who are in long-term care. With the financial turmoil last year resulting in a drastic contraction in individual wealth, stability has become a key concern for laid-off workers and first-time job seekers. Pondering long-term care in Taiwan at this point in time requires some deep thought.

It is not as if Taiwan does not have a long-term care program; the problem is the system is flawed, so not everyone in need receives equal care. One also has to bear in mind that institutional care is only a small part of the long-term care system and should be seen as a last resort, rather than as hospital wards or even prisons in disguise. The nation’s long-term care system relies greatly on migrant workers. As the living standard in neighboring countries rises, this kind of long-term care system will be difficult to maintain.

It isn’t a problem of the government not paying any attention to long-term care, but rather the existing system is unable to keep up with public demand and the changing times. As long-term care is supervised by local governments, how can financially strapped counties map out an innovative, comprehensive and long-term plan?

There are two major misconceptions about about long-term care. First, many think it only concerns the elderly, whereas in truth any person of any age might require long-term care any time. Second, long-term care is not tantamount to medical treatment. If the government fails to improve the long-term care system, it will become increasingly common for emergency care beds to be occupied by chronically ill patients. Not only does this increase the burden on the National Health Insurance (NHI) program, it also leads to waste of limited resources.

A compulsory public insurance program is not necessarily the only solution to financing long-term care. If the government does decide to promote long-term care insurance, it may need to set up a separate program under the NHI. Why? There is a difference in product structure, market, target, service providers and financial management. The NHI is a short-term insurance program in which premiums paid this year do not cover next year. The entire financing system is pay-as-you-go. A long-term care insurance program, however, is an extended insurance in which premiums are calculated based on the population structure of future generations, so that it will not increase the burden on them.

Germany is often cited as an example in discussions on long-term care insurance programs. However, the Netherlands was actually the first country to implement such a program. Germany has drawn more attention given its economic status. Japan has also implemented a long-term care insurance program. In 1993, despite its financial troubles, then German chancellor Helmut Kohl resolutely pushed through his government’s plan and submitted a draft for a long-term care insurance program to the parliament. Within four months, the draft passed its third legislative reading.

When I was studying in Germany 20 years ago — the year when the Berlin Wall collapsed — I witnessed the efficiency of the German administrative system, which finished installing the system within a year.

A long-term care insurance program is not a new system and it is not as complex as the NHI. I hope the government will exercise its executive power to set up a comprehensive system for long-term care so that a benevolent system will soon be put in place to help those in need.

Chou Li-fang is dean of the Office of Research and Development at National Chengchi University.